Opinion: Why Apple needs to make a four-inch 'iPhone 7'

updated 04:40 pm EDT, Tue May 3, 2016

by MacNN Staff

High-end four-inch 'iPhone 7' would be a win-win for Apple, customers

One of the bright spots for Apple iPhone sales in recent times is the relative success of the iPhone SE. Although it wasn't included in Apple's "disappointing" March quarter results for iPhone sales, it has been selling gangbusters. As we pointed out in our review of the iPhone SE, it is the best value for money iPhone ever, and that probably has a lot to do with its desirability. Its success also suggests that the four-inch form factor still has market appeal, even though the overall consumer trend is towards smartphones with larger displays. Given the success of the iPhone SE, and the fact that Apple is facing the combined challenges of "currency headwinds," due to a strong US dollar, and a flat global market for smartphones, it needs to give serious consideration to introducing a flagship four-inch "iPhone 7."

Today's consumer is pretty savvy, thanks in great part to the Internet, which gives you the opportunity to quickly do some research on the go before you buy a product. When Apple launched the iPhone 6 back in late 2014, it was plainly obvious that there was no high-end four-inch iPhone 6 in sight -- there were, however, two new models, one with a 4.7-inch display, and one with a 5.5-inch display. Given the emphasis that Apple had placed on the ergonomics of the four-inch form factor in its marketing for what was the flagship iPhone 5s at the time, it did seem odd, if not disingenuous, that Apple did not create a new flagship four-inch model to sit alongside its 4.7-inch and 5.5-models.

There is no doubt that tooling up for an all-new four-inch flagship smartphone to sit alongside all-new 4.7-inch and 5.5-inch models would have been a significant manufacturing cost. However, even if most iPhone customers want an iPhone with a larger display, Apple had already demonstrated with the huge sales of the initial four-inch iPhone 5 and 5s in 2013 and 2014, in face of stiff competition from Android vendors with a plethora of large-screened devices, that there was still a market for high-end four-inch devices. Sure, Apple might have been feeling the pressure of locking itself into offering just a single four-inch form factor for the 2014 smartphone market in particular, but to abandon potentially millions of customers the who opted for four-inch iPhone 5 or 5s was a minor betrayal. This is especially true if they went along with Apple's thinking about how this form factor is much easier to use one-handed.

Further, of all the manufacturers that can offer a high-end smartphone with a thin and compact four-inch form factor, it is Apple. Apple's chip engineers, led by Senior VP of Hardware Technologies Johny Srouji, has for some time held an advantage over the chip making competition like Qualcomm, with both the efficiency and performance of its custom A-series chips. Virtually every Android flagship smartphone had little choice but to use a five-inch or larger form factor, as Qualcomm, the leading supplier of high-end Android smartphone chips, couldn't (and still can't) compete with Apple's highly-efficient and powerful dual-core A-series designs. This has, by and large, necessitated larger, thicker, Android designs as they require the additional thermal design space to operate properly. The higher clock speeds and larger displays also meant that their batteries -- by necessity, not design -- need to be larger and heavier than those Apple fitted to its devices.

Even then, Qualcomm's 2.5GHz Snapdragon 810 octa-core first-gen 64-bit chip from early 2015 suffered from overheating issues. On paper, even though its performance was still well off the pace of the second-gen 64-bit Apple A8 dual-core chip clocked much lower at 1.4GHz, the chip throttled down performance whenever it had to throttle up under load, because of the very same overheating issues. The issue was so bad, that Samsung dropped the Snapdragon 810 from its Galaxy S6 flagship in favor of its off-the-shelf ARM-based Exynos 7420 octa-core chip. The only relatively compact Android flagship on the market of any note is the Sony Xperia Z4/Z5 compact -- but they have a 4.6-inch display, and are still much chunkier than Apple's iPhones.

If Apple had released a high-end four-inch iPhone 6/6s purely as a marketing exercise, it would have been a valuable one. Even if this hypothetical iPhone model didn't sell as well as the larger models, it would have still afforded Apple the opportunity to further emphasise its chip-designing prowess. Imagine the marketing power of a four-inch iPhone smoking the five-inch plus-sized Android competition? In fact, to some extent, this is what Apple is now doing, albeit belatedly, in its marketing of the iPhone SE. However, it is a little hard for the high-end smartphone audience to get too excited about this model, as it continues with a design that dates back three years -- even if we at MacNN still think it's great. Giving customers the power to choose an iPhone that bests suits their needs is also a great selling point.

An Apple A10 powered four-inch iPhone would go a long way to embarrassing the Android competition even further. As we highlighted in our comparison of the Galaxy S7 Edge with the iPhone 6s Plus, even now, Samsung with its semi-custom Exynos 8890 octa-core is only able to function at its peak 2.3GHz clock speed thanks to its inclusion of a water cooling heat pipe system. Apple engineers are surely chuckling that Samsung's engineers have had to resort to such crude measures (while marketing the pipe as a 'feature' of course), in order to remain competitive with the 1.8GHz dual-core A9 chip powering the iPhone 6s range. Not only is the single-core performance of the A9 still superior (which is the key metric of smartphone chip performance), Apple as we know has been able to drop this chip into the new four-inch iPhone SE.

Apple stands to gain a lot from the launch of a four-inch high-end flagship, with a fresh design and zero compromises. I cannot think of a single reason why it shouldn't be looking to go down this path. The success of the iPhone SE shows that there is still strong interest in this more ergonomic form factor, while Apple is more than able to support an extra iPhone model in its product line up. Yes, it is true that Apple's current position of strength was built on Steve Jobs's decision to streamline its product portfolio, but Apple today is in a much different position it was in then. A four-inch flagship iPhone would serve to bolster its iPhone range, and highlight it's technology lead, which is something that it needs to do if it is to ensure strong iPhone sales into the future.

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4 Comments

I doubt Apple is that concerned about embarrassing its competition. They manage that well enough themselves. My hunch is that there won't be a iPhone 7 Micro, or whatever Apple might call a 4" version of the iPhone 7. It'd be expensive to design, particularly given the small size, and it would primarily reduce sales of the SE. Over time and as costs come down, Apple is likely to add to the iPhone SE the few iPhone 6 features missing from it. But the company has a big winner in the iPhone SE. It'd be foolish to do anything to threaten its sales. Also, keep in mind that one reason the penny counters at Apple can justify the lower profit margin on the iPhone SE is that it doesn't include a "fresh design and zero compromises." If it did, it'd begin to reduce the sales of those more profitable and fresher designs. It's the compromises that allowed Apple to justify the lower price.

I agree with you @inkling in that Apple was able to price the iPhone SE lower because it did not use a fresh design, even though it used the top-of-the-line A9 CPU and camera from the iPhone 6s.

However, the upside for Apple making a 4-inch high-end model with a fresh design is that it can charge the premium for this model. This price differentiation would then help to keep iPhone SE sales secure, but drive up its profit margins for the higher-end 4-inch form factor equivalent (not that I am thrilled as a consumer about the massive margins Apple makes on its high-end products).

In fact, if anything, the iPhone SE would be more likely to canibalize a high-end 4-inch iPhone 7 than the other way around. Apple, though, would rather that customers canibalize its own range, rather than switch to the competition.

Well said, Sanjiv. I also think Apple should make a flagship 4". Maybe the SE is kind of a test device to help decide.

I hadn't really thought about the possible inability of other makers to create a full-featured phone of that size, but I'm not sure that was the reason. I think initially it was a spec-war kind of thing, that caught on, especially for people moving towards a phone as their only device. (As much as I like a smaller iPhone, if my phone would be my only computing device, I'd get the 6s Plus as well!)

The mistake I think Apple made (and some of the language and actions confirm it, IMO) is that they saw the success of the bigger Android phones as a trend... and followed it, without considering the need to keep the smaller sizes around. Then, I think selling older models to fill that gap was the backup plan, until they finally gave in with the SE to test the waters again.

Originally Posted by just a poster

I like the ipod touch form factor, would really like a phone that size.

Yea, I actually wouldn't mind it being that size either. But the 4" is kind of right at that edge, as it's just a a bit taller. Width is the critical thing.

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